Deepak Gupta | Apr 26, 2018 |
How to check taxability of goods or service in case of change in GST rate
GST was introduced on 1st July 2017. Since then many changes have come in rates of manygoods and service. Now the question is How to check taxability of goods or service in case of change in GST rate
I would like the readers to refer time of supply provisions of goods & service tax as these provisions are the ladder to check taxability of a goods or service in case of change in rate of GST. Section 14 of CGST Act 2018 deals with mechanism of determining time of supply in case of change in rate of tax in respect of supply of goods or services.
1 .When the goods or services or both have been supplied before the change in rate of tax:
Case i ) Invoice has been issued and the payment has been received after change in rate of tax
In this case the time of supply shall bethe date of receipt of payment or the date of issue of invoice, whichever is earlier.
Case ii ) Invoice has been issued but the payment has been received after change in rate of tax
In this case the time of supply shall bethe date of issue of invoice.
Case iii ) Payment has been receivedbut the invoice has been issued after change in rate of tax
In this case the time of supply shall bethe date of payment.
2 .When the goods or services or both have been supplied after the change in rate of tax:
Case i ) Invoice has been issued but the payment has been received after change in rate of tax
In this case the time of supply shall bethe date of payment.
Case ii ) Invoice has been issued and the payment has been received before change in rate of tax
In this case the time of supply shall bethe date of receipt of payment or the date of issue of invoice, whichever is earlier.
Case iii ) Payment has been receivedbut the invoice has been issued after change in rate of tax
In this case the time of supply shall bethe date of invoice.
This time of supply shall help in determining the GST Rate of good or service. This can be explaine with the following example:
Suppose GST rate of a service was changed from 12% to 5% with effect from 12th October 2017. What should be the applicable GST rate in this case
| Provision of Service | Issue of Tax invoice | Receipt of Payment | Time of Supply | Applicable Tax Rate |
| Before the rate change | Before the rate change | Before the rate change | As per normal provisions of 12 or 13 of CGST Act 2017 | 12% |
| After the rate change | After the rate change | After the rate change | As per normal provisions of 12 or 13 of CGST Act 2017 | 5% |
| Before the rate change | Before the rate change | After the rate change | Issue of Tax invoice | 12% |
| Before the rate change | After the rate change | After the rate change | Date of receipt of payment or the date of issue of invoice, whichever is earlier | 5% |
| After the rate change | After the rate change | Before the rate change | Issue of Tax invoice | 5% |
| After the rate change | Before the rate change | Before the rate change | Date of receipt of payment or the date of issue of invoice, whichever is earlier | 12% |
| After the rate change | Before the rate change | After the rate change | Receipt of Payment | 5% |
| Before the rate change | After the rate change | Before the rate change | Receipt of Payment | 12% |
Please comment in the comment section given below for any queries or suggestions.
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